A three-dimensional numerical study has been carried out to analyze the unsteady flow and heat transfer in a micro-channel with an array of periodically mounted square cylinders. The current geometry represents a micro-heat exchanger and has potential applications in the cooling of turbine blades and electronic cooling. The cylinder dimensions are of the order of few microns. The three-dimensional unsteady Navier-Stokes and energy equations are solved using higher order temporal and spatial discretizations. The simulations have been carried out for a range of Reynolds number based on cylinder width (180–600) and a Prandtl number of 6.99. Conjugate heat transfer calculations have been employed to account for the conduction in the solid cylinder and convection in the fluid. The flow is found to become unsteady at a critical Reynolds number that falls between 250 and 400. The flow shows quasi-periodic behavior with multiple frequencies at a Reynolds number of 400. The heat transfer enhancement compared to a plane channel is marginal (1.1–1.4 times) for the steady flow cases whereas it is significant (12–15 times) when the flow is unsteady. The friction factor was found to decrease with Reynolds number in both the steady and unsteady regimes. However, the friction factor increases at the critical Reynolds number where it becomes unsteady in nature.